4
The 2011/12 cotton planted area is now estimated to remain at 1.35 million hectares with production estimated at 8.75 million bales. Post now estimates Brazil’s 2011/12 cotton exports at 3.7 million bales, an 85 percent increase over the 2 million bales exported in 2010/11.
Foreign Agricultural Service
29 September 2011
Cotton and Products Update

The 2011/12 cotton planted area is now estimated to remain at 1.35 million hectares with production estimated at 8.75 million bales. Post now estimates Brazil’s 2011/12 cotton exports at 3.7 million bales, an 85 percent increase over the 2 million bales exported in 2010/11.

THIS REPORT CONTAINS ASSESSMENTS OF COMMODITY AND TRADE ISSUES MADE BY
USDA STAFF AND NOT NECESSARILY STATEMENTS OF OFFICIAL U.S. GOVERNMENT
POLICY
Required Report - public distribution
Date: 9/9/2011
GAIN Report Number: BR0716
Brazil
Cotton and Products Update
2011-12 Planted Area Expected to Remain Even with 2010-11
Approved By:
Fred Giles, Director - ATO Sao Paulo
Prepared By:
Jeff Zimmerman, Agricultural Attaché
Report Highlights:
Post lowered 2010/11 Brazil?s cotton production estimate from 9 million bales to 8.5 million bales a 5.5
percent decrease on 1.35 million hectares with the largest producing state of Mato Grosso harvesting
lower yields due to the early onset of the dry season. The 2011/12 cotton planted area is now estimated
to remain at 1.35 million hectares with production estimated at 8.75 million bales. Post now estimates
Brazil?s 2011/12 cotton exports at 3.7 million bales, an 85 percent increase over the 2 million bales
exported in 2010/11. In addition, Post estimates Brazil?s domestic 2011/12 consumption to remain flat
at 4.35 million bales.
Author Defined:
Production, Supply and Demand Statistics:
Brazil
Cotton (Local)
1000 HA and 1000 480 lb. Bales
2009/2010 2010/2011 2011/2012
Official Data Official Data Post Official Data Post
Post
(a) (b)
Market Year Begin 08/2009 08/2010 08/2011
Area Planted 0 0 0 0
Area Harvested 836 836 1,350 1,350
Beginning Stocks 4,992 4,991 4,366 7,369
Production 5,450 5,465 8,500 8,750
Imports 151 150 703 50
MY Imports from U.S. 0 0 605 30
Total Supply 10,593 10,606 13,569 16,169
Exports 1,990 1,990 2,000 3,700
Use 4,400 4,400 4,350 4,350
Loss -150 -150 -150 -150
Total Dom. Cons. 4,250 4,250 4,200 4,200
Ending Stocks 4,353 4,366 7,369 8,269
Total Distribution 10,593 10,606 13,569 16,169
Brazil?s 2010/11 cotton production reduced with early onset of the dry season
Post lowered 2010/11 Brazil?s cotton production from 9 million bales to 8.5 million bales a 5.5 percent
decrease on 1.35 million hectares with the largest producing state of Mato Grosso harvesting lower
yields due to the early onset of the dry season. This early onset of dry weather adversely affected the
pod fill and boll weights with a lower fiber-to-seed ratio below 38 percent and 5.5 bales fiber
equivalent/hectare on average. The state of Bahia has been harvesting excellent yields exceeding 6.8
bales fiber equivalent/hectare with the fiber-to-seed ratio around 40 percent.
Brazil?s 2011/12 cotton planted area steady and production to increase slightly
The 2011/12 cotton planted area is now estimated to remain the same with 1.35 million hectares with
production estimated at 8.75 million bales. The 2011/12 yield is expected to increase to 6.5 bales per
hectare slightly over the 2010/11 yield of 6.3 bales per hectare based plantings occurring in preferred
planting windows. This upcoming season is expected to see a reduction in the number of smaller
producers, who opted to plant cotton last year amid historic high prices, and maintenance of large
producer participants. These large producers are better capitalized and able to manage the high
risk/return ratio associated with cotton production which costs three to four times as much as soybean
per hectare depending on the location. Given the higher investment-to-profit risk in cotton production,
trade sources confirm that a future sales price of cotton needs to be between $1.10-$1.15 per pound to
make cotton production more attractive in 2011/12 than producing soybeans and corn.
The state of Mato Grosso, with 50 percent of national production, will continue to be the largest
producing state and is expected to maintain or slightly reduce planted area. The 40:60 ratio of first-to-
second crop cotton planted area is predicated on the arrival of rains by mid-September. This will to
allow for the harvesting of early-maturing soybeans, followed by the planting of second crop cotton.
The 2010/11 average cotton yields in Mato Grosso were reduced as a result of the late planting of the
second crop cotton, which was carried out in the months of higher risk months of February and even
into March. The late planting of the second crop was due to a three-week delay in the initial arrival of
rains at beginning of the crop season. In addition, an increase in second-crop cotton planted area could
occur should the U.S. dollar appreciate favorably relative the Brazilian real before January 2012. Any
reduction in the 2011/12 planted area in Mato Grosso is expected to be offset by an increase in the
planted area in the second largest producing state of Bahia. Bahia has harvested back-to-back seasons
of excellent quality cotton (31 score) which has been received favorably by the international export
market.
2011/12 Exports estimated to be a record 2.2 million bales
Post now estimates Brazil?s 2011/12 cotton exports at 3.7 million bales an 85 percent increase over the
2 million bales exported in 2010/11. Brazil?s cotton exports last month (August) set a new monthly
record of 537,000 bales, well above the monthly national export capacity that has averaged 460,000
bales per month.
2011/12 Consumption to remain flat under decreasing GDP growth estimates in key markets
Post now estimates Brazil?s domestic 2011/12 consumption to remain flat at 4.35 million bales. The
Brazilian textile industry continues to be cash-strapped after weathering the historic price spikes early
this year and unable to pass on in full the additional production costs to consumers. The 2011/12
demand outlook is weak given the economic slowdowns forecast in the United States and the European
Union. In particular, the work wear sector has already seen a decrease in demand as firms conduct cost
accounting and reduce the rate of issuing new work wear uniforms to employees. Trade sources also
confirm that the Brazilian milling industry is experiencing overcapacity with 41-day stocks.
Other relevant reports:
BR0706 - 2011 Annual Cotton Report